| KAMPALA-A syndicate of three Indian nationals headed by Jigar Chandarana a director of Wellex Hardwar have been trading in fictitious invoices presented to Uganda Revenue Authority (URA), causing final loss to the taxpayers. It is said the cartel has gotten a lot of money from the new clients whom they sell the fake invoices to cheat government by asking for tax returns. One of the companies that have benefited from the syndicate is China Railway No.3 Engineering Group Limited. Information obtained reveals that China Railway No.3 Engineering Group Ltd claimed input VAT of about Shs211. 9 million from fictitious purchases of about Shs1.1 billion, causing revenue loss to the government of Uganda. China Railway is a subsidiary of China Railway Group Limited, one of the biggest construction enterprises in the world. The company is also ranked among the Fortune Global 500 and is listed on the Shanghai and Hong Kong stock exchanges. Jigar and his accomplices had declared these fake invoices as output VAT between 2018-2023. Last Wednesday security raided Chandarana’s Wellex Hardware Limited and arrested him and other Indians following a probe into the tax affairs of the company after URA received information about an Indian businessman suspected of trading tax invoices among companies registered for VAT purposes. The Indians are said to have made sales to their clients but also generated and sold several tax invoices to their hardware clients for an illegal fee. The Anti-Corruption Court in Kololo found the Indians guilty of generating and selling fictitious invoices. They were convicted on five counts of making false statements to a tax officer, an offense contrary to Section 58(1)(a) of the Tax Procedures Code Act, 2014. Each defendant was ordered to pay a fine of Shs20 million or face five years imprisonment in default. URA’s lawyers were able to secure about Shs 102.9 million in taxes, which Wellex Hardware Limited agreed to pay in full as assessed. “It should be remembered that improving domestic revenue collection is a pressing objective for the Government of Uganda, and combating the evasion of taxes is an important tool for boosting revenue collection, yet goons, like the Indians, are helping people to cheat government,” said a Kampala tax expert. This is not helped by the fact that URA may lose Shs2.8 trillion to tax exemptions, credits and deferrals for the financial year 2022/2023. This was revealed by the URA Commissioner General, John Musinguzi while presenting the entity’s Budget Framework Paper for the financial year 2023/2024 in January January 2023. According to Musinguzi, over time they have been losing money in form of tax exemptions, allowances rate reliefs and credits and deferrals. However, this financial year 2022/23 (July 2022 to June 2023), URA is expected to collect Shs25.55 trillion. “While mobilising Shs25.55 trillion is an uphill task, we are confident that this goal is attainable with the help of every tax-paying citizen and economic player,” says Musinguzi in a recent revenue performance brief. For the next financial year which begins on July 1, 2023, URA has a target of collecting Shs29.7 trillion. |
How Indian fraudsters are making govt lose tax revenue
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